Friday, October 19, 2007

The Australian Dream: Out Of Reach For Ordinary Australians

There has been growing concern over the housing affordability crisis for quite some time. The latest figures however have taken us into unknown territory. Now, for the first time, a family will need a household income of more than $100 000 in order to qualify for a mortgage to buy a median priced home. In other words, an average family can no longer afford to buy an average house. Naturally there is a growing expectation that the government will somehow “fix” the problem. The fact is that government has been part of the problem, in particular State and Local governments adding to the cost of development with increasingly excessive levies and charges. In the end, if capital values continue to be over-inflated, the market will find a way to correct itself. That’s why it’s appropriate for home affordability to be on the Federal election agenda. If the crisis can be managed so as to provide an easing over time, it would help to avoid the risk of a more damaging market collapse at some point in the future. After all, that is something we really can’t afford.

Your thoughts?

Thursday, October 18, 2007


Do we have teenage drug dealers in our schools? Well, the short answer is yes. But to some extent that misrepresents the problem. Although there may be some who could be described as dealers, the real problem is more about social behaviour and perceptions of what is cool and what is not cool. There is very good evidence that drug incidence in schools is falling, and that the drug education programs are working. Kids nowadays are better informed than ever before, and are more likely to understand the risks involved in drugs. That’s not to say that things are perfect, because they are not. It remains true that drugs are alarmingly easy to obtain in our community, and some drugs, such as ecstasy, are seen as harmless fun and a social enhancer. When drugs do enter a school it’s more likely that they’ve been passed around among friends, or obtained from older siblings and sometimes even parents. To whatever extent that we may have a drug problem in our schools, it reflects a problem in the broader community. That has been amply demonstrated by Ben Cousins, and before him, Andrew Johns. It’s not just the parents who need to worry, it’s all of us.

So are we winning the so-called war on drugs? Can we win it? Either way I don’t believe we can afford to run up the white flag.

What do you think?

Tuesday, October 16, 2007

Are taxcuts enough to buy your vote?

John Howard has launched his election campaign with a bang. $34 billion worth of tax cuts is going to get anybody’s attention. But will it get their vote? It’s almost a tradition in this country to announce tax cuts in an election year, made possible by the inevitable effects of bracket creep. Without indexation of the tax thresholds, wages growth over time propels people into higher tax brackets and erodes their disposable income in real terms. This makes it possible for a government to make itself appear generous from time to time by giving back some of what it has taken. With a massive and growing budget surplus, the government is clearly collecting more tax than it needs, and it’s only right that the excess is given back. But it would be more honest to index the thresholds so that too much tax isn’t collected in the first place. Then there is the question of whether the money could be better spent on improving other things, for example highways and hospitals. Despite the fact that these are primarily state government responsibilities there is a widely held expectation that whoever the federal government might be after the election, they should do something to fix the perceived problems. And with so much money in the federal budget surplus surely that is a reasonable expectation for taxpayers to have.

So how would you spend the money? Taxcuts? Or highways and hospitals?

Monday, October 15, 2007

Can John Howard avoid the iceberg, or is he already sunk?

Can John Howard stage the biggest comeback by an incumbent Prime Minister in the history of Australia? All this year the opinion polls have been pointing to an A.L.P. victory, with some newspapers using headlines such as RUDDSLIDE! If we are to believe the polls we might as well not bother having the election at all, but simply hand over the keys to The Lodge to Kevin Rudd. But, of course, it’s not that simple. Opinion polls are not necessarily reliable indicators of election results. They can change dramatically during the course of an election campaign, and sometimes they don’t even agree with each other. However, the fact is the opinion polls have all been consistent all year. The fact is that no other incumbent Prime Minister has come from so far behind to win. The fact is that all the available evidence points to a Kevin Rudd led Labor victory. There is one more fact to consider. If anyone can perform such a miraculous comeback John Howard is your man. His determination and skill are not to be underestimated. I suspect, however, that many voters have already decided that it’s time for this government to go, and it would take an extraordinary development to turn that around.

So what do you think? Is it too late for John Howard?